In the realm of trading, GBP/USD is showing signs of potential retracement, driven by USD dynamics. Despite a mixed week for the GBP, marked by fluctuations, it stands resilient against external threats. Chancellor Hunt’s GBP20 billion injection into the economy, as announced in the Autumn Statement, has bolstered market confidence, deterring rate cut speculations for 2024.
This week, GBP faces moderate impact data, with the spotlight on speeches by various BoE policymakers. Despite the slow start, GBP/USD’s clear pattern of higher highs and higher lows suggests a bullish trend. The RSI nearing overbought territory could trigger a retracement, with key resistance at 1.2680 and potential support at 1.2550, 1.2500, and 1.2450.
EUR/GBP, having broken out of a six-month range, faced resistance at 0.8760, triggering a selloff. The wedge pattern breakout and violation of the bullish structure suggest potential shorts. A retest of the wedge pattern could offer a risk-to-reward opportunity, targeting the 100-day MA at 0.8635, and further down at 0.8600 and 0.8560.
Meanwhile, GBPAUD remains rangebound within a 400-pip range, offering defined support at 1.9000 and 1.8950, and resistance at 1.9211 and 1.9278. A potential spike to the 200-day MA at 1.8911 could present opportunities. Retail traders on GBPUSD show a Contrarian View, with 55% holding SHORT positions. This suggests a potential rise, highlighting the importance of understanding market sentiment.
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